Kenya parliament stops Sh11 billion pipeline upgrade payments

Kenya’s Parliament has instructed Kenya Pipeline Company (KPC) to halt the payment of Sh11 billion to Zakhem International Construction the firm for ongoing works on new the Mombasa – Nairobi pipeline.

Parliament’s Public Investment Committee (PIC) Chairman Adan Keynan, said any additional payments on the key energy sector project would be an unnecessary burden to the country’s taxpayers.

“The committee has today ordered KPC not to accept the cost variation made by Zakhem International on the Mombasa – Nairobi pipeline,” said Keynan.

The committee further instructed Zakhem International to provide additional details on the status of the project to ensure it is delivered on time.

PIC ordered the construction firm to complete works on the new by the 30th of April 2017.

The directive came after members of the PIC made an inspection tour of line 5 enhancement project (Mombasa-Nairobi) between 2nd to 4th February 2017 to ascertain its progress.

The PIC expressed concern that any further extensions or delays in the completion of the project would result in further cost escalations that would overburden taxpayers with the project having already received two prior extensions. The PIC further

KPC’s Managing Director, Joe Sang said the overall project completion is now at 78 percent while construction of the actual pipeline is 90 percent complete. “KPC’s focus now is on construction and installation of equipment at the new pump stations,” said Sang.

KPC is replacing the existing Mombasa-Nairobi pipeline that has been in operation for 38 years. A Vision 2030 flagship project, the construction of the 20-inch diameter 450km pipeline commenced in the year 2014 and is expected to be completed in April 2017.

Once complete, the pipeline will ensure sustained, reliable and efficient transportation of petroleum products in the region and meet demand in the next 30 years. The pipeline will have an installed flow rate of 1 million litres per hour in phase one.

KPC is also undertaking the construction of four additional storage tanks at Nairobi Terminal each with a gross capacity of 33,366,000 litres. The additional tanks will more than double the storage capacity of diesel and super petrol from the current 100 million litres to 233 million litres effectively providing sufficient capacity for receipt of higher volumes of product expected once the Mombasa–Nairobi pipeline is replaced.

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